Question: Um Good, Inc., a candy maker, is thinking of purchasing a new machine. A marketing firm has estimated that the new machine could increase revenues

Um Good, Inc., a candy maker, is thinking of purchasing a new machine. A marketing firm has estimated that the new machine could increase revenues by $25,000 a year for the next five years. The expenses (including depreciation) directly relating to the machine total $100,000 ($20,000 × 5 years). The initial purchase cost would be $50,000. What is the unadjusted rate of return?

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